Abstract:

Methods for a data processor implemented system monitor for enabling
persons to turn over the allocation their investment assets, and/or
receive assistance concerning how to receive disbursements from
investments, in a manner that is free from or ameliorates the traditional
conflicts of interest in previous systems. The methods are adapted to
ameliorate the tension between other functions where the compensation may
be affected by asset allocation. The systems and methods collect,
monitor, and direct information from persons who hold indicative data,
e.g., employers, to provide professional asset allocation services
including automatic allocation, rebalancing, and reallocation of
investment assets, on a regular basis; as well as assistance in
determining how much to save or how to receive disbursements in a manner
that ameliorates conflicts of interest, which, in the case of employee
benefit plans, is consistent with the regulatory restraints of ERISA.

Claims:

1-4. (canceled)

5. A method for providing discretionary asset allocation services for an
investor participating in an employer-sponsored benefit plan,
comprising:making an investment in an investment vehicle for the
investor, based on changing investor data including investor
age;automatically changing at least one investment in the investor's
investment vehicle based on the changing investor data including investor
age, said automatically changing step being provided in accordance with
allocation software that is developed, approved, or maintained by a
person who does not derive fees or profits which vary substantially
depending on the automatic changing of the at least one investments in
the investor's investment vehicle.

6. A method according to claim 5, wherein the automatically changing step
is performed by allocation software which is implemented, developed,
approved, or maintained by at least one independent person who is
independent of any other party who may earn variable fees or profits
based on the changing of the investments in the investor's investment
vehicle.

7. A method according to claim 5, wherein the providing step is
automatically provided by the at least one person who does not derive any
fees or profits that substantially vary in accordance with the changing
of the investments in the investor's investment vehicle.

8. A method for providing a discretionary asset allocation program for an
investor participating in an employer-sponsored benefit plan, the
discretionary asset allocation program provided by (i) at least one
conflicted person who receives variable fees or profits for providing
services related to the discretionary asset allocation program, or (ii)
the at least one conflicted person in concert with at least one person
who is substantially independent of the at least one conflicted person,
comprising the steps of:providing at least one discretionary asset
allocation program for the at least one investor;storing data for the at
least one investor in data storage media;automatically implementing
discretionary investment allocation decisions utilizing the provided
discretionary asset allocation program, the discretionary investment
allocation decisions are automatically implemented by a process that
reduces or eliminates the at least one conflicted person's ability to
self deal, and wherein the basis for the discretionary investment
allocation decisions are implemented, developed, or maintained by the at
least one substantially independent person; andusing computer-readable
media to automatically implement discretionary investment allocation
decisions, wherein the computer-readable media is implemented, developed,
approved, or maintained by the at least one substantially independent
person.

9. A method according to claim 8, wherein the step of automatically
implementing discretionary investment allocation decisions includes the
step of eliminating or at least ameliorating possible economic conflict
of interest by separating or appropriately combining, the determination
of how much to save and how to allocate investment assets from other fee
generating functions.

10. A method according to claim 8, wherein the computer-readable media is
created by one or more computer programmers who have no affiliation with
the at least one conflicted person who may receive variable fees or
profits under the program by reason of asset allocation.

11. A method according to claim 8, wherein the step of automatically
implementing discretionary investment allocation decisions changes
investments in an investor's discretionary asset allocation program based
on (i) the investor's current age or (ii) the investor's projected
retirement age.

12. A method for providing discretionary asset allocation services for at
least one investor participating in an employer-sponsored benefit plan,
comprising the steps of:identifying investment needs of the at least one
investor based on investor data, the investor data including at least
investor age;providing discretionary asset allocation services for the at
least one investor based on the investor data, said step of providing
discretionary asset allocation services including the step of providing
at least one investment vehicle for the at least one investor;wherein the
step of providing discretionary asset allocation services for the at
least one investor includes the step of selecting at least one investment
vehicle based on a computer program implemented, developed, approved, or
maintained by at least one independent person who is independent of any
other party who may earn variable fees or profits based on the allocation
of investments in the at least one investment vehicle;wherein the step of
providing discretionary asset allocation services for the at least one
investor includes the step of providing the discretionary asset
allocation services by: (i) at least one conflicted person who receives
variable fees or profits for providing services related to the
discretionary asset allocation program, or (ii) the at least one
conflicted person in concert with at least one person who is
substantially independent of the at least one conflicted person;
andreducing possible economic conflict of interest by separating the
determination of how much to invest and how to allocate investment assets
from the at least one conflicted person.

14. The method of claim 12, wherein the step of providing discretionary
asset allocation services for the at least one investor includes the step
of providing one or more investment vehicles including at least one
professionally managed commingled investment vehicle.

Description:

RELATED APPLICATIONS

[0001]This application is a Divisional of U.S. patent application Ser. No.
10/073,632, filed Feb. 11, 2002, entitled "SYSTEMS AND METHODS FOR
IMPROVING INVESTMENT PERFORMANCE", which claims priority benefit of: U.S.
Provisional Patent Application Ser. No. 60/349,162, filed Jan. 16, 2002,
of Tarbox et al., entitled "IMPROVED SYSTEM FOR ALLOCATING PENSION ASSETS
WITH OR WITHOUT AN AFFIRMATIVE ELECTION," U.S. Provisional Patent
Application Ser. No. 60/349,459, filed Jan. 14, 2002, of Tarbox et al.,
entitled "SYSTEM FOR ALLOCATING PENSION ASSETS WITH OR WITHOUT AN
AFFIRMATIVE ELECTION," and U.S. Provisional Patent Application Ser. No.
60/267,771 filed Feb. 9, 2001, of Tarbox, entitled "SYSTEM FOR ALLOCATING
PENSION ASSETS WITH OR WITHOUT AN AFFIRMATIVE ELECTION," and is related
to U.S. Pat. No. 6,154,732, issued Nov. 28, 2000, of Tarbox, the
disclosure of each of the above is herein incorporated by reference.

BACKGROUND OF THE DISCLOSURE

[0002]The present disclosure relates generally to an innovative investment
program, which is designed to improve investment performance for
investors, including participants in Benefit Plans, by automatically
determining appropriate savings levels and automatically allocating,
rebalancing and reallocating investment assets (which generally include
taxable and tax-deferred assets, and may include assets in Benefit Plans,
once an investor so directs or in cases where a third party can direct on
behalf of the investor, without receiving direction from the investor)
for investors, while eliminating or, at least, ameliorating the conflict
of interest that would otherwise exist between a provider of automatic
allocation services and persons (e.g., money managers, registered
investment advisors, etc.) that would normally benefit from such
automatic services. The innovative investment program includes, but is
not limited to, systems and methods that are computer housed software
programs for collecting, monitoring, and directing data from persons, who
hold investors' indicative data, including, but not limited to, sponsors
of pension plans, money managers, and affiliates of such persons.

[0003]The field of individual savings, including retirement savings, has
been greatly impacted by the vigorous growth of the stock market and
retirement plans that offer individual accounts. Both of these recent
phenomena generally require the individual investor to both determine how
much to save and how to invest savings, including directing the
investment of the assets allocated in his or her individual savings
account or similar account. Considering the continuing erosion of
traditional Benefit Plan pension plans (which are managed on behalf of
individuals and, in this regard, require no action from such
individuals), the approaching retirement of the baby-boom generation, and
the growing interest in Social Security reform, effective savings,
including the effective use of the Benefit Plan, as defined hereinafter,
is a cornerstone of an effective retirement policy for the United States
of America, or any other country facing the above challenges, and is
believed will have a staggering impact on future national and state
policy as well as future national and state budget allocation decisions.

[0004]In the case of Employee Benefit Plans ("Benefit Plans" are
arrangements, including trusts or other vehicles associated with such
arrangements, which hold assets generally designed to be saved until
after termination of employment, including, but not limited to,
employer-sponsored 401(k) plans, and individual retirement plans and
annuities and other similar plans), Benefit Plan sponsors and public
policy officials have been very concerned about the effective
"utilization" of Benefit Plans and the implications thereof with respect
to the future of at least Social Security for some time. Investments in
employee education, expanded investment choices, lifestyle funds,
retirement planning software, online advice tools, etc. have all been
produced with the goal of improving the overall national savings rates,
including Benefit Plan utilization (i.e., raising participation rates,
generally increasing salary deferral levels and establishing/maintaining
appropriate asset allocation).

[0005]Unfortunately, the above-described methods are yet to achieve the
desired results. Despite investments in the above described methods, most
individuals, including many participants in self-directed, individual
account plans, do not even participate, and when most individuals do
participate, most individuals do not appropriately save and invest,
including a failure to participate in 401(k) plans, nor do they save
sufficient amounts, as reported in O. S. Mitchell, J. F. Moore, 1998,
"Can Americans Afford to Retire? New Evidence on Retirement Saving
Adequacy," Journal of Risk & Insurance 65(3), 371-400, and/or most
individuals do not appropriately allocate their assets, including assets
in their retirement accounts, to adequately provide for their future
retirement income needs.

[0006]As is known, individual investors as opposed to institutional
investor populations can roughly be divided into two groups as follows:

[0007]Financially "Involved":

[0008]The "financially involved," as defined in the present application,
are believed to already be doing better than the average Benefit Plan
participant but are generally not yet saving or allocating their saving
in an optimal manner. The financially involved presently save in greater
(and generally more appropriate) amounts and are believed to generally
appreciate additional tools and information and would apparently benefit
from these and additional services, though not as to the same extent as
the financially uninvolved apparently would benefit.

[0009]Financially "Uninvolved":

[0010]The "financially uninvolved," as defined in the present application
are believed responsible for the bulk of the investment shortcoming
problem, as the participation of the financially uninvolved in employer
sponsored pension or savings vehicles, (including Benefit Plans savings)
and asset allocation behavior is inconsistent with that which would be
implemented by a qualified financial professional. The financially
uninvolved do not appreciate tools and information and appear to simply
want to be handed a solution for retirement investing with the least
amount of their personal involvement as possible.

[0011]Drastically improving the resulting problems described above
(including under utilization of employer sponsored Benefit Plans)
requires meeting the needs of the "financially uninvolved,"" which
typically represents well over sixty percent (60%) of the employee
population. Recent studies indicate that, in the case of section 401(k)
Employee Benefit Plans, the financially uninvolved group's 401(k)
participation, and investment decisions vary tremendously with the way
that the 401(k) participation and investment options are presented to the
plan participants. The findings from these studies strongly suggest that
current 401(k) Employee Benefit Plans are not optimally designed to meet
the needs of the "financially uninvolved" segment of Employee Benefit
Plan eligible employees.

[0012]Specifically, it is presently believed that the problems described
above for both the financially involved and the financially uninvolved
result from the fact that currently, individuals are either: 1) too
involved in the process of selecting investments and frequently do so by
choosing investments based on the recent performance of individual
investment vehicles; 2) do not save appropriate amounts to meet their
goals, including retirement; or 3) more often, they feel they do not have
the time, interest, and/or expertise to make appropriate investments or
structure appropriate savings plans.

[0013]The above described individual-investor behavior is in contrast to
institutional investors, who recognize the importance of appropriately
funding for future liabilities, and then determine an appropriate funding
policy and asset allocation model to best fund future liabilities, and
only then select investment vehicles based on the ability to implement
the model allocation-thus recognizing that money management (e.g.,
security selection) is of secondary importance for passive, long-term
investors.

[0014]The process described above as used by individuals typically results
in inadequate funding levels (low savings rates) and inappropriate
investment including suboptimal allocations. Specifically, it is
presently believed that the problems described above for both the
financially involved and the financially uninvolved result from the fact
that, currently, the process of carrying out the necessary steps to
appropriately save, as outlined above, is still too overwhelming for even
the financially involved, much less the financially uninvolved.

[0015]It is presently believed that one of the possible reasons for the
inadequate savings situations, as describe above, is that saving for the
future is typically something that is put off until tomorrow, especially
by financially uninvolved investors and especially, by individual Benefit
Plan participants in the absence of effective investment assistance. In
the case of Employee Benefit Plans lack of participation by eligible
employees, it has been and is presently a persistent problem that Benefit
Plan sponsors face with the implementation of Benefit Plans. Benefit Plan
sponsors are all too familiar with employees who always intend to enroll
in the Benefit Plan, but somehow never quite get around to submitting the
authorization that will enable the Benefit Plan sponsor to deduct the
contributions (savings) from the employees pay on a regular basis.
Various academic studies and consulting reports indicate that somewhere
between one-quarter and one-third of 401(k)-eligible employees do not
participate in their company-sponsored 401(k) Benefit Plan. (See, for
example, Poterba, Vent, and Wise (1994), Andrews (1992), and Bassett,
Fleming and Rodrigues (1998) for academic studies and Fidelity
Investments (1999) for a consulting report).

[0016]One of the main reasons given by individual investors for
nonparticipation in Benefit Plans for which they are eligible is that the
process of optimally making a decision to start any savings plan,
including participation in a 401(k) plan is complicated, as viewed by the
average potential Benefit Plan participant or eligible participant.
Studies by psychologists have shown that increasing the complexity of a
decision-making task leads individuals to defer making a decision or to
procrastinate and such appears to be prevalent among the average
potential Benefit Plan participants.

[0017]It is presently believed that there are at least two sources of
complexity in starting any savings program, such as, for example, Benefit
Plans, including making the initial decision to "opt in" as a plan
participant and then making an optimal 401(k) Benefit Plan investment
allocation decision. First, the shear number of possible investment
allocation options to be evaluated by individual investors is enormous.
Each individual investor must first choose what fraction of their
compensation or other income to contribute (savings) to the Benefit Plan.
With respect to 401(k) Benefit Plans, generally a range of from one
percent (1%) to fifteen percent (15%) of an employee's compensation is
offered as possible options. Each individual investor must then choose
how to allocate their contribution (savings). In the case of 401(k)
Benefit Plans, there are between, on average, ten or more investment
options that are available. Outside a 401(k) Benefit Plan, the investment
allocation options are, as a practical matter, unlimited. Even in most
401(k) Benefit Plans there are, quite literally, an infinite number of
investment allocation combinations available.

[0018]For the "financially uninvolved" employees, a second source of
complexity is learning how to evaluate the myriad of 401(k) Benefit Plan
investment allocation options that are available. For example, despite
significant investments in employee education, studies show year after
year that more than fifty percent (50%) of employees do not even know
what a "money market fund" is, much less have the knowledge to
intelligently choose from among the myriad of 401(k) Benefit Plan
investment allocation options that are available.

[0019]Thus, individual investors may rationally postpone making a decision
on savings, including 401(k) Benefit Plan participation, most likely
because the cost in time and effort of gathering the information
necessary to make an intelligent choice from among the myriad of 401(k)
Benefit Plan investment allocation options that are available may exceed
the short-term benefit of making such a decision, as viewed by large
numbers of individual investors.

[0020]Recently, some Benefit Plan sponsors have reversed the above
described retirement savings procrastination simply by using automatic
enrollment in 401(k) Benefit Plans. Under automatic enrollment,
individual employees who do not actively request to be excluded from a
Benefit Plan are enrolled and a default contribution deferral amount
(savings) is automatically deducted from their paycheck (usually 3% of
pay) and contributed (saved) to their 401(k) Benefit Plan. The default
deferral amount is invested in a default investment vehicle, usually
something conservative, such as, for example, a money market, or other
relatively stable value fund. Individual employees who do not wish to
participate in the available 401(k) Benefit Plan must actively submit
their election to "opt-out" (rather than to "opt-in") the company
sponsored Benefit Plan.

[0021]Results to date of such an automatic enrollment policy show that
automatic enrollment appears to be a "win-lose" approach to changing
401(k) Benefit Plan savings behavior with the "win" aspect being that
automatic enrollment has dramatically increases participation. For
example, using automatic enrollment, McDonald's has managed to achieve a
ninety five percent (95%) enrollment, an astonishing number for a largely
unskilled workforce. Participation in the 401(k) plan at J.C. Penney Co.
jumped to eighty nine percent (89%) of its 257,000 employees, from the
low seventy percent (low 70%), a year after the retailer launched its
automatic enrollment participation policy. Additionally, Hewlett-Packard
increased the enrollment of new workers in the company 401(k) plan from
under fifty percent (50%) to ninety eight percent (98%) by implementing
an automatic enrollment policy.

[0022]Moreover, while automatic enrollment appears to substantially
increase the overall 401(k)-participation rate, automatic enrollment also
has another important effect of equalizing participation rates across
various demographic subgroups. The effects are largest among the groups
with the lowest participation rates under the previous regime of
affirmative elections, particularly blacks and Hispanics, the young, and
employees with lower levels of compensation.

[0023]As the United State's personal savings rate--savings as a percentage
of disposable income--fell to a quarterly low of about three tenths of
one percent (0.3%) in the first quarter 2000, the Internal Revenue
Service (IRS) issued two rulings (Revenue Rulings 2000-8 & 2000-33) in
2000 approving automatic enrollment for employees already on payrolls and
for participants in 403(b) retirement plans for nonprofit and educational
workers and for 457 plans for government workers.

[0024]Noting that 75 million Americans do not participate in a retirement
pension plan and have little or no other retirement savings, Treasury
Secretary Lawrence Summers and Labor Secretary Alexis Herman issued a
joint statement praising automatic enrollment as a "promising method of
encouraging participation by those who disproportionately have been
missing the benefits of a regular, disciplined approach to retirement
savings. We encourage employers to consider adopting automatic
enrollment."

[0025]Beyond a genuine desire to help employees save for retirement,
companies have pragmatic reasons to offer automatic enrollment to their
401(k) Benefit Plans. Utilizing automatic enrollment has proven to be an
effective means for increasing the contribution level for non-highly
compensated employees so that these companies' 401(k) Benefit Plans meet
discrimination tests and, thereby, allow highly compensated employees to
maximize their contributions to the companies' 401(k) Benefit Plans.

[0026]However, as is usually the case, there is always a down side. In the
situation described above, the "lose" aspect of automatic enrollment
being that automatic enrollment has apparently generated a tremendous
amount of employee Benefit Plan participant inertia. The same inertia
that kept and continues to keep eligible employees from initially signing
up as 401(k) Benefit Plan participants, also keeps employees from taking
maximum advantage of the 401(k) Benefit Plan after the employees are
automatically enrolled in the 401(k) Benefit Plan. A substantial
percentage of 401(k) Benefit Plan participants hired under an automatic
enrollment policy exhibit "default behavior"--sticking to both the
default contribution level and the default investment allocation, both of
which is usually less than optimal with respect to future impact on the
individuals or national budgetary policy.

[0027]For example, a study conducted by Hewitt Associates and released in
July 2000 (See, for example, Hewitt Associates (in conjunction with
Harvard University and the Wharton School of the University of
Pennsylvania), "Enrolling Employees in 401(k) Plan Not A Cure All")
looked at the participation and default behavior of more than 53,000
eligible employees hired before and after automatic enrollment was
initiated at two U.S. companies (Companies A and B) over a one to
two-year period. Both companies automatically enrolled employees in
conservative stable value funds at a two percent (2%) to a three percent
(3%) percent contribution rate. As reported in the study, more than half
of the eligible employees remained at the companies' conservative default
elections for both contribution level and investment allocation.

[0028]Further, after the automatic enrollment program was implemented, an
average of sixty three percent (63%) of eligible employees hired under
automatic enrollment at Company A contributed at the default rate; fifty
seven percent (57%) percent invested in the default fund and fifty one
percent (51%) remained at both default elections. At Company B, an
average of sixty two percent (62%) of eligible employees participating
under automatic enrollment contributed at the default rate; sixty seven
percent (67%) invested in the default fund and fifty eight percent (58%)
remained at both default elections.

[0029]Similarly, the Madrian and Shea (2000) study (See, for example,
Madrian, Brigitte C.; Shea, Dennis F. "The Power of Suggestion: Inertia
in 401(k) Participation and Savings Behavior," NBER Working Paper No.
W7682, May 2000) found that an average of seventy five percent (75%) of
Benefit Plan participants hired under automatic enrollment contributed at
the default rate of three percent (3%); eighty percent (80%) invested in
the default money market fund and about sixty one percent (61%) did
nothing to change their savings/investment behavior from the default
specified by the plan sponsor or company if no other action was taken.

[0030]The good news for the automatic enrollment policy is that 401(k)
Benefit Plan participation is much higher under the Benefit Plan
automatic enrollment policy than when an affirmative election by an
individual plan participant is required in order for an eligible
individual employee to actively participate in the Benefit Plan. It is
believed that the best explanation for the low participation rate of new
hires, in the absence of an automatic enrollment policy, is that the
decision to participate in the Benefit Plan is complicated, which leads
individual employees to defer making a decision and to procrastinate with
respect to making a definite decision. Utilization of an automatic
enrollment policy apparently decreases the perceived complexity of the
401(k) Benefit Plan participation decision by decoupling the
participation decision from the savings and investment decision.

[0031]The bad news, however, is that roughly sixty percent (60%) of the
employees that have been automatically enrolled subsequently did nothing
to increase their fairly low three percent (3%) contribution rate or to
reallocate their contributions away from the default investment option to
a more individually appropriate investment or to recognize the importance
of appropriately individual funding for future liabilities, and then
determine an appropriate individual funding policy and asset allocation
model to best fund individually perceived future liabilities, and only
then select investment vehicles based on the ability to implement the
individual model allocation--thus recognizing that money management
(i.e., security selection) is of secondary importance for passive,
long-term investors. Again, complexity-induced procrastination appears to
best explain why roughly sixty percent (60%) of automatic enrollees--the
financially uninvolved--fail to change the initial default investment
choices to more individually appropriate investment(s).

[0032]The "financially uninvolved," it is believed, have a much greater
tendency to stick with the status quo investment(s) (when one is
available) as financial decisions become more difficult. Additionally, it
is highly likely that the "financially uninvolved" view the default
contribution rate and investment allocation under automatic enrollment as
including an implicit approval by their employer, who sponsors the
Benefit Plan, of such investment decision as being the appropriate
investment decision for them, the specific employee. In this respect the
"financially uninvolved" may be correct in that, absent an affirmative
election, one or more plan fiduciaries (typically including in this type
of activity, the plan sponsor acting as a fiduciary) is responsible under
the Employee Retirement Security Act of 1974 or "ERISA" (which is the law
that is generally applicable to private sector retirement plans) for the
default investment allocation.

[0033]The results from an automatic Benefit Plant enrollment policy also
have implications for the design of public policies to encourage savings
that have long term budget and budget deficit impact. The above described
results of the present automatic Benefit Plan enrollment policy
implementation strongly suggest that, if Social Security reform were to
include the adoption of partially self-directed individual accounts, as
proposed by the Bush Administration, a substantial percentage of
individuals would end up with the default plan investments as specified
by the Federal Government. In both cases, getting the default investment
allocation "right" will have a tremendous impact on the distribution of
retirement savings available to individual Benefit Plan participants. If
the default investment allocation is not optimized, citizens, in general,
and Benefit Plan participants in particular, will most likely have less
retirement income, pay less tax and, as a result, create additional
financial demands and stress on the government because, as a result of
less optimum investment allocation during the life of a Benefit Plan
participant, the government will collect less revenue and, thus, have
less income. At the same time government will most likely be experiencing
increased demand for services from persons with inadequate retirement
income. In this regard, existing evidence indicates that the negative
effect caused by the increased demand for services from persons with
inadequate retirement income would tend to be concentrated among persons
who are the least advantaged members of United States society, and, as a
result, the social strains resulting from such members, who have not
fared well in optimizing their investment allocation, could be expected
to increase. (See, for example, "Investment Without Education, The
Disparate Impact of Women And Minorities in Self-Directed Defined
Contribution Plans," by Jane Elizabeth Zaglein published in 2001 in the
Employee Rights and Employment Policy Journal at 5 Empl. Rats. & Employ.
Pol'y J. 223.)

[0034]Thus, in order to convert the present automatic Benefit Plan
enrollment policy from an apparent "win-lose" proposition to a "win-win"
proposition, a viable way must be developed to move "financially
uninvolved" employees out of the default investment option(s) and into
investment option(s) having individual appropriate contribution rates and
investment allocations without compromising the Benefit Plan sponsors'
need for freedom from any significant possibility of litigation by reason
of providing asset allocation and savings assistance to Benefit Plan
employees, which has been a considerable obstacle in the past.

[0035]Another problem that has surfaced is that Benefit Plan sponsors are
increasingly concerned that by the Benefit Plan sponsors increasing the
initial contribution rate, employees may be induced to opt-out of 401(k)
Benefit Plan participation, and just as there has been and is
participation inertia, there will be non-participant inertia as well.

[0036]The above-mentioned studies show that a majority of eligible
employees who fail to act on deciding whether and how much to participate
in a Benefit Plan will also be likely not to decide on how to optimally
invest their contributions in an individually appropriate investment
vehicle to achieve an individually appropriate investment allocation.
Under the facts outlined by IRS revenue Ruling 98-30, if a Benefit Plan
participant has made a no-investment election, then the Benefit Plan can
invest the contributions in a balanced fund that includes both
diversified equity and fixed income investment vehicles.

[0037]Many Benefit Plan sponsors are wary of choosing default fund
allocations that includes equities because they are concerned that the
Benefit Plan sponsors will be blamed if the investment returns fall or
are negative during adverse market periods. Consequently, most automatic
Benefit Plan enrollments use conservative investments (e.g., money market
find or stable value find) as the Benefit Plan default allocation.

[0038]Additionally, IRS included a warning in IRS revenue Ruling 98-30
ruling that the Department of Labor will not consider the Benefit Plan
participant or beneficiary to have exercised the type of control over
Benefit Plan investment choices that is necessary to justify relaxing
fiduciary responsibilities in the ERISA section 404(c) Benefit Plan
regulations. In this case, the fact that the Benefit Plan participant or
beneficiary is merely told of the Benefit Plan investments that will, in
the absence of instructions to the contrary, be made on his or her behalf
cannot be considered control of the Benefit Plan investment decision by
the Benefit Plan participant. Therefore, other Benefit Plan fiduciaries
will not be relieved of responsibility for the results of the Benefit
Plan investment by reason of ERISA section 404(c).

[0039]Finally, as noted above, many employees consider the Benefit Plan
default investment as affirmative Benefit Plan investment advice received
from the company or Benefit Plan sponsor. A person who provides Benefit
Plan investment advice with respect to retirement assets under ERISA is
acting in a fiduciary capacity, and such advice must comply with ERISA's
general prudence requirements. Specifically, ERISA §404(a)(1)(B)
states that "the fiduciary should act with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of like character and with like aims." Thus, it
appears highly questionable that a prudent expert would ever use a "one
size fits all" investment selection approach for all individual Benefit
Plan participants (such as investing in a money-market fund), given the
clear known existence of the enormous individual differences in funding
requirements, time horizon, risk tolerance, etc., and other factors
related to making an optimum asset allocation and investment decision,
including Benefit Plan asset allocation.

[0040]Moreover, prudent procedures generally require that an appropriate
allocation of Benefit Plan investment asset classes be used that will
yield the highest probability of meeting a particular Benefit Plan
participant's long-term investment objectives without exceeding
tolerances for short-term investment market volatility. Again, it is
highly questionable that a prudent expert would recommend a conservative
Benefit Plan investment allocation such as a money market fund for
younger Benefit Plan participants, which when combined with a low Benefit
Plan default contribution rate, will likely ultimately result in the
realization of an inadequate amount of savings in order to fund future
retirement income needs at an appropriate level without placing undue
financial burdens on various government organizations and adversely
impacting national budgetary considerations.

[0041]The Benefit Plan default investment allocation is important because
a number of studies have concluded that Benefit Plan asset allocation
decisions have the greatest impact on the overall long-term performance
of a Benefit Plan investment portfolio. A recent study found that, for
passive, long-term investors, asset allocation determines about one
hundred percent (100%) of performance-regardless of whether one is
measuring return variability across time, return variation between funds,
or return amount. For the short-term investor, who trades more
frequently, invests in individual securities, and practices market
timing, asset allocation has less of an impact on returns. Thus, the
impact of asset allocation on performance is directly correlated with
investment behavior. (See for example, Roger G. Ibbotson and Paul D.
Kaplan, "Does Asset Allocation Policy Explain 40%, 90%, or 100% of
Performance?" Financial Analysts Journal, January/February 2000.)

[0042]It is believed that this study has particular significance for
workers using 401(k)-type plans to save for retirement. A study of
year-end 1998 data by the Employee Benefit Research Institute and the
Investment Company Institute (ICI) found that approximately seventy-five
percent (75%) of 401(k) participants had not changed their equity
allocations in the previous two years. Thus, a substantial percentage of
401(k) participants exhibit long-term, passive investment behavior when
managing their self-directed retirement assets. For the great majority of
401(k) participants (i.e., the "financially uninvolved"), asset
allocation (rather than security selection or market timing) is the
dominant determinant of performance on their individual plan accounts.

[0043]The problem with specifying a one-size-fits-all Benefit Plan default
allocations is that, for individuals, appropriate Benefit Plan
contribution levels and asset allocation determinations are based on the
employee's unique needs and circumstances, which change over time as
employees get closer to retirement and individual employee wealth
increases. The Benefit Plan goal should be to devise appropriate
long-term investment strategies that will assist employees with meeting
both their short, intermediate, and long term investment objectives with
the least amount of unacceptable or inappropriate risk for their
particular circumstances at a particular time. The risk an individual
employee can afford not only depends on his/her attitude towards risk,
but his/her total financial situation. The earning ability outside the
employee's investments in the Benefit Plan is also important in
determining the individual employee's capacity for risk. Employees with
high earning abilities are able to take more investment risk, because
they can, more easily recoup from poor performing investment and
resulting financial losses than those employees with lower earning
abilities can.

[0044]The first step in arriving at appropriate Benefit Plan default
investment strategy is to coordinate a savings plan with an optimal
portfolio that facilitates the Benefit Plan participant to appropriately
find future retirement income needs. The criterion used for selecting the
initial Benefit Plan investment allocation is based on cash flow needs
and "Human Capital"; "Human Capital" being defined as the actuarial
present value of future retirement savings, Benefit Plan pension income,
and Social Security income. Thus, the variables important to the
calculation of Human Capital include retirement savings (401(k), IRA,
etc.), current and retirement age, mortality and life expectancy, gender,
real long term interest rates, Benefit Plan pension income and Social
Security income. Human Capital is usually the dominant asset for young
and middle-aged employees as Benefit Plan financial assets would be a
tiny fraction of their total wealth.

[0045]Thus, in accordance with the above, it is quite reasonable for
younger employees to hold an all-stock investment Benefit Plan
allocation, because of their ability to offset short-term losses through
adjusting future Benefit Plan investment strategy, consumption and
savings. As employees become older, the proportion of Human Capital in
total wealth becomes smaller; therefore, over time the Benefit Plan
investment allocation needs to be gradually adjusted to become less
aggressive.

[0046]As previously discussed, it makes little sense to use automatic
Benefit Plan procedures to enroll younger employees and increase their
Benefit Plan contribution level over time, and then use the Benefit
Plan's money market fund, or similar vehicle as the default Benefit Plan
investment choice to invest their Benefit Plan contributions. Similarly,
it may be imprudent to use the Benefit Plan's balanced fund or similar
vehicle as the default Benefit Plan choice for older employees, who may
lack the ability to make up losses that may occur during adverse market
conditions.

[0047]Another problem that has long been acknowledged relating to
optimizing investment portfolios for Benefit Plan participants is that
the entities and/or persons most capable of delivering an optimum
investment solution typically have financial interests that may be or are
inconsistent with that of the individuals who need investment allocation
services. For example, in the case of entities that administer Benefit
Plans, they are typically the same entities that traditionally manage the
investments of the investment vehicles normally offered in connection
with Benefit Plans. Such investment managers receive most (if not all) of
their compensation as a percentage of assets managed, with such
percentages varying according to the nature of the risk associated with
the particular investment vehicles. For example, an international equity
find would typically pay a manager a higher percentage resulting in a
higher net profit than a domestic bond fund manager for finds having
approximately the same assets under management. In the case of financial
intermediaries (such as licensed securities brokers), they typically
receive differing levels of initial and subsequent commissions depending
on the investment they choose or advise a person to choose.

[0048]Similar or identical conflicts of interest also occur when
determining how to invest at a time when persons are no longer working.
For example, investors must choose at that time whether to purchase a
stream of income (e.g., an annuity) in order to hedge against the risk of
outliving the money that has been put aside for retirement. Persons who
typically provide assistance with these decisions receive commissions
when they sell annuities and therefore have or may have interests that
could affect the quality of the assistance that they provide. Persons who
manage investments for a person, and are compensated based on a
percentage of the amount they manage, would have an incentive to
recommend or otherwise cause a person to withdraw amounts as slowly as
possible in order to maximize the income of the investment manager at the
expense of the investors best interest.

[0049]These situations could lead to persons with inconsistent interests
intentionally or unintentionally acting to cause amounts to be saved or
invested so that these persons with inconsistent interests enjoy a higher
income, a situation possibly not in the best interest of the individual
Benefit Plan participant whose funds are being invested by the persons
providing traditional services for the Benefit Plan.

[0050]Thus, there is a clear need for a new and innovative investment
program that eliminates or at least significantly ameliorates this
economic conflict of interest by, for example, providing for a separation
between the entities or entity that determines how much to save and how
the savings should be invested from other compensated functions such as
the investment management. Such an investment program should provide
compensation for the critical functions of determining how much an
individual should save and how the savings should be invested in a manner
that reduces or eliminates conflicts of interest including those that
result from receiving compensation from other sources including
compensation from investment management.

[0051]Such a new and innovative investment program should be implemented
by separating or not separating the Benefit Plan allocation and savings
function from the Benefit Plan money management function in such a way
that conflicts are, if not eliminated, at least ameliorated. As is known,
the substantial effect of conflicts on financial institutions has been
documented in the Study (Conflicts of Interest and the Credibility of
Underwriter Analyst Recommendations by Michaely and Wolmack published in
1999) that was cited before Congress in the hearings in Congress held on
Jun. 14, 2001, by the Committee on Financial Services, Subcommittee on
Capital Markets, Insurance and Government Sponsored Enterprises on
"Analyzing the Analysts: Are Investors Getting Unbiased Information from
Wall Street". By providing that the two functions may be separated so as
to ameliorate or eliminate such conflicts, implementing such a new and
innovative investment program would increase the likely and perceived
quality of the Benefit Plan allocation services with a corresponding
positive effect on the marketplace and individual Benefit Plan
participant confidence, thus making optimum Benefit Plan savings more
likely.

[0052]The above separation should also eliminate the need for artificial
and less precise mechanisms to address issues such as fee leveling
(charging the same fees for each investment vehicle), as these other
methods do not precisely address the fundamental conflicts, which are
variable profits, since the same fee may result in higher profits. The
above separation should also eliminate offsets, or offsetting the cost of
investment vehicles with higher fees by rebating a portion of the fees,
directly or indirectly to a Benefit Plan, which also may cause certain
functions to be more profitable and others to be underpaid because, like
fee leveling, offsets only addresses the gross amount (and not the
profits) of the fee paid.

[0053]Thus, there is a clear need for a new and innovative investment
program that separates the Benefit Plan allocation and money management
function, which would be a significant improvement over the
aforementioned offset mechanisms, as the Benefit Plan allocation and
money management function separation also addresses conflicts that can
occur during both the Benefit Plan accumulation and disbursement modes
for investing when the subject services (e.g., Benefit Plan asset
allocation, Benefit Plan formulation/implementation of saving plans, and
Benefit Plan formulation/implementation of distribution plans) are
controlled by the same person.

[0054]In this connection, there is also a need to insure that the above
services, which have traditionally been paid for indirectly, e.g., from
commissions paid for executing Benefit Plan stock trades or fees from
Benefit Plan money management, are ameliorated, as this traditional
payment may have contributed to the unacceptable current state of
affairs, which finds that many persons will not obtain the benefit of the
subject Benefit Plan services if they have to pay a separately stated fee
for them, even though the subject Benefit Plan services clearly provide
more value than other Benefit Plan services for which participants pay
more (e.g., Benefit Plan asset management). Typically, when other
services subsidize the subject Benefit Plan services, there is a
temptation for Benefit Plan service providers to maximize their profits,
often in a manner that is to the detriment of an individual Benefit Plan
participant (e.g., churning or excessive trading), making it desirable to
separate these Benefit Plan services from other Benefit Plan functions so
that the fees for the Benefit Plan subject services can remain
non-obvious, but that other Benefit Plan functions that subsidize these
Benefit Plan services will not be utilized in a manner that disrupts the
subject Benefit Plan services. This is believed to be significant because
the subject Benefit Plan services will determine the great majority of an
investor's investment returns.

[0055]In this regard, the new and innovative investment program should
address the conflict of interest that could occur in connection with the
following: the system commits investors, with a minimum of indicative
data, to as automatically as is possible or practical, allocate a portion
of the investors' future salary increases towards retirement savings,
based on formulae originated and/or approved by a person or persons,
possibly including a determination of what constitutes a minimum of
indicative data, who are independent of persons who receive other
compensation such as fees for Benefit Plan money management. Ideally, the
new and innovative investment program should result in automatic Benefit
Plan deductions from which Benefit Plan participants have to
affirmatively elect to opt out of, if they wish to discontinue Benefit
Plan participation and/or change their contribution to the Benefit Plan.

[0056]The systems and methods of the new and innovative investment program
should automatically as is possible or practical allocate Benefit Plan
investment assets to an optimal combination of asset classes on a regular
basis, based on the unique facts and circumstances of each individual
investor, either based on an election by the person whose assets are
invested or by a third party who is independent of persons who earn
variable fees and profits by reason of the allocation of the assets or
the savings levels established, in order to systemically address and
ameliorate any potential conflict of interest. The Benefit Plan
allocation should result either from a single or multiple affirmative
directions or in the case where a third party can act on behalf of the
individual, with no direction from the individual.

[0057]The systems and methods of the new and innovative investment program
should choose or assists persons in choosing an appropriate manner in
which to receive Benefit Plan income during a time when they are no
longer saving but instead consuming prior savings (e.g., at retirement).

[0058]The systems and methods of the new and innovative investment program
should provide for oversight of the conditions designed to eliminate or
ameliorate conflicts of interest within the Benefit Plan.

[0059]The systems and methods of the new and innovative investment program
should provide a guarantee, whereby professional Benefit Plan allocation
is precisely implemented according to the criteria specified by the
Independent Expert and is guaranteed to those investors who participate
in the investment program.

[0060]The systems and methods of the new and innovative investment program
should in addition to using automatic Benefit Plan savings based on the
unique characteristics of the individual Benefit Plan participant (which
savings amounts are formulated or approved by the Independent Expert),
including automatic enrollment in pension plans, to provide appropriate
savings, resulting in most cases a substantial boost in savings, and in
the case of pension plans to increase Benefit Plan participation rates
and then automatically tailor each investor's Benefit Plan investment
plan to each investors unique circumstances, making appropriate changes
on a regular basis, without obtaining an affirmative election from the
Benefit Plan participant each time a change is made, while, in the case
of pension plans, help address the needs of the employer who sponsors the
Benefit Plan for participant investment safety.

[0061]The systems and methods of the new and innovative investment program
should address the above indicated needs by utilizing safeguards that
address the Benefit Plan conflicts of interest, thereby reducing the
Benefit Plan sponsors' responsibility and exposure in selecting and
monitoring the Benefit Plan investment program.

[0062]The systems and methods of the new and innovative investment program
should address the problems resulting from the fact that currently,
individual Benefit Plan participants are either: 1) too involved in the
process of selecting Benefit Plan investments and frequently do so by
choosing Benefit Plan investments based on the recent performance of
individual Benefit Plan investment vehicles; 2) do not save appropriate
amounts to meet their goals, including retirement; or 3) more often, feel
that they do not have the time, interest, and/or expertise to make
appropriate Benefit Plan investments or structure appropriate Benefit
Plan savings plans.

[0063]The systems and methods of the investment program should solve the
above problems by minimizing the input required by individuals and
automating the Benefit Plan process to the greatest possible extent while
eliminating or ameliorating the conflict of interest that normally exists
between parties that provide these Benefit Plan services.

[0064]The systems and methods of the new and innovative investment program
should enable a person who operates the Benefit Plan investment program
to offer a meaningful guarantee (e.g., no fees are owed if the investment
program is not 100% effective) regarding its effectiveness. The guarantee
can be that the allocations for investors will precisely match the
criteria of the Independent Expert. No person who currently offers
"investment advice" or "education" and is solvent has or could reasonably
offer a meaningful guarantee.

[0065]The systems and methods of the new and innovative investment program
should offer such a guarantee because they are granted discretionary
investment management authority from the individual plan participant or a
third party on behalf of an investor, and thus exercise control of the
allocations on a regular basis. "Investment advisors" will not make such
a guarantee because they are granted non-discretionary investment
management authority, and thus do not exercise control of the allocations
on a regular basis.

[0066]The systems and methods of the new and innovative investment program
should result in limiting legal exposure by providing an automatic
allocation based on the individual characteristics of participants and a
formula established by an Independent Expert.

[0067]The systems and methods of the new and innovative investment program
should provide a data processing system that reduces their input and
enables individuals, including 401(k) participants, or persons acting on
their own or their behalf, to turn over some or all of these decisions to
others, including the ability to automatically enroll and commit
employees in advance to allocate a portion of their future salary
increases towards retirement savings, which participants have to opt out
of if they wish to discontinue. The net result should be that individuals
are more likely to achieve their goals mostly because it utilizes the
natural tendency of most individuals to minimize their involvement (many
take no action whatsoever) in formulating and implementing savings and
investment plans.

[0068]The systems and methods of the new and innovative investment program
should minimize individual involvement as such has a corollary benefit in
that when individuals are too involved individuals tend to engage in
excessive trading of their individual accounts. Research demonstrates
that active trading, on the average, materially diminishes investment
returns. If individuals are less involved, individuals are less likely to
trade and are therefore more likely to enjoy greater investment returns.

[0069]The systems and methods of the new and innovative investment program
should recognize a savings method, like automatic enrollment, that is
grounded in findings about the psychology of decision-making. First, most
workers realize they need to save more, but lack discipline. Second,
restrictions on consumption are much easier to accept if they do not
affect current consumption (i.e., they take effect in the future). For
example, we all plan our exercise and dieting regimes to start next week
or month. Third, people are very sensitive to perceived losses in their
welfare. While we can imagine foregoing some gain, bearing a loss is much
more difficult. And fourth, people tend to code gains and losses in
nominal rather than real dollars, so, for example, a pay increase that is
less than the rate of inflation may still be considered a gain rather
than a loss.

[0070]The systems and methods of the new and innovative investment program
should use the principles that current plan participants with low
contribution rates (i.e., less than 3 percent) and new/existing employees
who are not yet participating in the plan are automatically enrolled in a
plan that asks for a modest commitment now that gradually increases their
contribution level over a period of a few years. The amount should
generally be a fixed percentage (e.g., 2-3%) or a proportion of the pay
increase (e.g., 1/3 or a 1/2).

[0071]The systems and methods of the new and innovative investment program
should, by timing the increase to coincide with the pay increase, assure
employees that their take home pay does not diminish. In fact, since the
contribution to the saving plan is tax deductible, only part of the
increased saving is out-of-pocket, and the actual change in the paycheck
is likely to be unnoticeable. The increases continue until the worker
reaches the appropriate tax sheltered contribution, or until the worker
opts out of the plan.

[0072]The systems and methods of the new and innovative investment program
should, once employees are in the plan and automatically use this savings
method, recognize the inertia will help keep the employees in the plan,
as the vast majority of employees will not notice the difference in take
home pay, but in a few short years certainly notice the difference in
their individual Benefit Plan account balance. In fact, since the
contribution to the savings plan is tax deductible, only part of the
increased savings is out-of-pocket, and the actual change in the paycheck
is likely to be unnoticeable.

[0073]The systems and methods of the new and innovative investment program
should use a data processing system that collects, monitors and directs
information from individuals including pension plan participants,
sponsors, record-keepers and money managers, to optimally allocate
investment assets, including but not limited to pension assets, for
individual investors/plan participants based on their unique facts and
circumstances, with a minimum of input from the individual including a
single election or without an affirmative election from plan
participants. Such allocation should be automatically used to invest
individual investment assets, including assets in a 401(k) plan, which
will be monitored and automatically adjusted over time by qualified
experts, unless the individual elects to opt out of the automatic
allocation plan with an affirmative investment election.

[0074]The systems and methods of the new and innovative investment program
should be used in conjunction with the automatic enrollment and
contribution methods discussed above. As such, it can be used by plans
that use automatic enrollment for new employees, and for current
employees who either do not currently participate in the plan or do
participate in the plan but have not elected compensation reduction
contributions of a minimum amount (e.g., at least 3 percent). In addition
to 401(k) plans, the automatic allocation plan will be made available to
403(b) retirement plans, which serve millions of employees of public
schools, educational and charitable organizations, and to 457(b) plans,
which serve employees of state and local governments.

[0075]The systems and methods of the new and innovative investment program
should insure that an appropriate allocation is made for each individual
participant on a regular basis, the data processing system will include a
relational database that will be continually updated with relevant
employee indicative data (e.g., age, salary) and employer plan data
(participation status, investment options, employer match, account
balance, etc.), which is provided from outside sources including the
employer and the plan record-keeper. The data is used to feed the
financial analytic engine that will automatically allocate an optimal
investment portfolio on a regular basis--based on the participant's
retirement income replacement needs and human capital value.

SUMMARY OF THE DISCLOSURE

[0076]Therefore, an object of the present disclosure is to provide an
investment solution to investors, including Benefit Plan participants, in
attaining appropriate savings levels and asset allocation for their
investments including assets in their individual plan accounts on a
regular basis.

[0077]Another object of the present disclosure is to provide a new and
innovative investment program that provides for appropriate savings,
including utilization in self-directed Benefit Plans.

[0078]Another object of the present disclosure is to provide the ability
to collect indicative data from a variety of sources, including the
investor, which is used to determine appropriate savings levels and asset
allocations for investors on a regular basis, including individual
Benefit Plan participants.

[0079]A further object of the present disclosure is to provide for the
automatic savings and/or allocations of investment assets (including
making such allocations on an ongoing basis) based on an analysis of
indicative data.

[0080]A still further object of the present disclosure is to assist
individuals in determining how to invest and in choosing an appropriate
manner in which to receive income during a time when they are not longer
saving, but instead consuming prior savings (e.g., retirement).

[0081]The new and innovative investment program, which includes the
present systems and methods, integrates the level of savings with
appropriate asset allocation in a manner that minimizes input by
investors on a regular basis. Investors may be assisted in providing
their information and making appropriate decisions by a facilitator. The
determination of how much to save and how to allocate investments is
determined by person(s) compensated in a manner which is generally or
totally separate and independent from other fee generating functions such
as traditional investment management fees (normally a percentage of the
assets under management).

[0082]The systems and methods of the present disclosure eliminate or at
least ameliorate possible economic conflict of interest by separating or,
appropriately combining, the determination of how much to save and how to
allocate investment assets from other fee generating functions such as
investment management. The person(s) who determines or approves the asset
allocation and savings rate (the Independent Expert) receives fees that
are generally or totally independent from the fees charged for investment
management. The Independent Expert is generally or totally independent
from and unrelated to any other person who receives compensation in
connection with the subject transactions (which transactions include a
decision not to change any decision including asset allocations)
including any investment manager. The systems and methods of the present
disclosure can assure that the investment manager is unaware of the
individual pension participant investments, but rather sees only the
aggregate investments of a Benefit Plan sponsor.

[0083]One aspect of the present disclosure is a unique data processing
system that provides expert independent asset allocation on a basis that
minimizes the input and time of investors and similarly assists them in
establishing savings investment programs while, at the same time,
offering professional asset management (including index funds) at a more
efficient cost structure and eliminates or reduces all of the conflicts
of interest that would exist in all the presently known schemes of
providing investment allocation and/or savings investment programs to
investors, including Benefit Plan participants.

[0084]One representative system for providing asset allocation and savings
services to individuals includes a data storage for storing data from a
plurality of sources, including the individual; means for processing the
data from each source such that a savings investment program as well as
an asset allocation model consisting of at least one asset class is
established, the asset class(es) may including varying proportions of
shares (or other interests) in a plurality of investments, possibly
including collective investment vehicles; and a means for allocating
assets into a combination of at least two asset classes as appropriate
for each individual and generating a tangible report recommending, or
directly establishing a savings investment program that is appropriate
for each individual.

[0085]One representative computer implemented method for providing
independent asset allocation and savings investment programs to
individuals for investing in one or more asset classes including
professionally managed, cost efficient, commingled investment vehicles
while eliminating or ameliorating the conflict of interest between
establishing asset allocation and investment programs and other functions
such as money management includes the steps of: developing mechanisms
that elicit the funding needs of each individual; developing a savings
investment program and an asset allocation model consisting of at least
one asset class generally using generally accepted principles of modern
portfolio theory; applying the data from a plurality of sources to the
asset allocation model; coordinating the savings investment program with
the asset allocation model; determining an appropriate investment vehicle
or combination of vehicles for the individual; and implementing
investments in at least one asset class or at least (1) combination of at
the at least two (2) asset classes.

[0086]Other objectives and advantages of the present application will
become apparent from the following description, the accompanying
drawings, and the appended claims.

BRIEF DESCRIPTION OF THE DRAWINGS

[0087]FIG. 1 is a block diagram generally illustrating the structure of a
representative investment program including representative systems and
methods related thereto;

[0088]FIG. 2 is a representative detailed block diagram of one
representative implementation of one representative investment program
incorporating the systems and methods related thereto;

[0089]FIG. 3 is a representative diagram illustrating one representative
investment allocation and management system of the present disclosure as
seen by each investor including individual plan participants;

[0090]FIG. 4 is a representative diagram illustrating one representative
investment allocation and management system of the present disclosure as
seen by benefit plans; and

[0091]FIG. 5 is a representative schematic diagram of representative
computer hardware useful with the representative investment services of
the present disclosure.

DETAILED DESCRIPTION OF THE DISCLOSURE

[0092]In carrying out the present disclosure in representative preferred
forms thereof, we have provided a representative new and innovative
investment program 10 that includes representative systems and
representative methods for providing representative savings plan services
12 and discretionary asset allocation services 14 during the accumulation
mode (e.g., prior to and during employment), and discretionary and
non-discretionary asset allocation services 16 during the disbursement
mode (e.g., after employment) for an investor 18 such as, for example, a
participant in a Benefit Plan, or a third party 20 acting on the
investor's behalf, as illustrated in FIG. 1. Savings plan services 12 are
those services that assist investors during the accumulation mode such as
helping to determine or simply implementing the timing and amount of
amounts deducted from a paycheck for contribution to a savings
arrangement or vehicle such as a Benefit Plan.

[0093]In implementing these representative systems and representative
methods, an investment program operator 22 will generally offer the
investment program 10 together with representative investment allocations
26 (i.e., a most conservative allocation), 28 (conservative), 30
(moderate), 32 (aggressive), and 34 (most aggressive), as well as
annuities and other disbursement mechanisms 36, which are formulated with
investment vehicles 24 representing different asset classes that may be
used to implement the investment program 10. Any such allocations 26, 28,
30, 32, and 34 and/or annuities and other disbursement mechanisms 36, as
well as the investment vehicles 24 and asset classes used to implement
the investment program 10 during the accumulation and disbursement
mode(s), are selected by or subject to the approval of an Independent
Expert 38, as defined hereinafter (see FIG. 2), who must find or approve
that the investment program 10 can be implemented using the investment
vehicles 24 and annuities and other disbursement mechanisms 36.

[0094]Investor 18, as used in the present application, is a natural or
unnatural person who could benefit from one or more of the services 12,
14, and 16 under the investment program 10, including individual
participants and/or beneficiary of a Benefit Plan who may direct the
investments of their individual plan account(s). Thus, the term
participants in Benefit Plans, as used in the present application,
include participants and beneficiaries in Benefit Plans. As illustrated
in FIG. 4, Benefit Plans 100, 102, and 104 are arrangements, including
associated vehicles, designed to assist natural persons in saving for the
period that begins after termination of employment. A third party 20 is
any person who is responsible for making determinations on behalf of an
investor whether and how to utilize one or more of the services 12, 14,
and 16 offered under the investment program 10.

[0095]In the case of an investor 18 with a large amount of assets, the
investment program operator 22 may negotiate with regard to the
investment vehicles 24 and/or annuities 36 used to implement the
investment program 10 and even as to the formulae upon which asset
allocation and/or distribution will be determined, subject to the
approval of the Independent Expert 38. (As defined herein, the
Independent Expert is a person or persons who are generally or totally
independent of persons involved in the Investment Program 10 who may have
interests that are not consistent with the investors 18, in certain
circumstances an employer sponsoring one or more Benefit Plan(s) 100,
102, and 104 may be an Independent Expert 38). The negotiations may
include the extent to which a separate fee is paid for the investment
program 10 and/or the extent to which any such fees is subsidized by the
fees paid in connection with investment vehicles 24 and/or annuities and
other disbursement mechanisms 36 that are affiliated with the program
operator 22. The program operator 22 then offers discretionary asset
allocation during the accumulation mode 14; formulation/implementation of
(as well as advice) regarding savings plan services 12 during the
accumulation mode and formulation/implementation of (as well as advice
on) discretionary and non-discretionary asset allocation during the
disbursement mode 16. These services 12, 14, 16, and 18 may be offered
singularly or in any combination.

[0096]The investor 18, or a third party 20 acting on behalf of an
investor, including participants in Benefit Plans 100, 102, and 104, then
chooses which services 12, 14, 16 to utilize and selects which investment
assets 24 they wish to be in the program 10. For example, in the case of
a section 401(k) plan, the person acting at the plan level 100, 102, and
104 may decide that amounts that the employer contributes to the plan
will be invested in employer securities and will not be part of the
investment program 10. And, in the case of an investor 18, including
participants in Benefit Plans 100, 102, and 104, at least one may also
wish to constrain certain assets (e.g., do not sell the home rent to my
mother) and receive asset allocation services on the non-constrained
assets.

[0097]In cases where a third party 20 (e.g., the employer sponsoring the
plan) acts on behalf of an investor 18 who is a participant in a Benefit
Plan 100, 102, and 104 to cause the investor 18 to participate in one or
more services 12, 14, and 16 of the investment program 10, the investment
program 10 will generally provide an opt out provision 40, which will
enable an individual plan participant to opt out at 42 of one or more
services of the investment program 10. Under limited circumstances, there
may be no ability to opt out of the investment program 10.

[0098]As illustrated in FIG. 2, data included in indicative database 44
(which can be obtained from the investor 18 such as a participant in a
Benefit Plan and/or a third party 20 such as benefit plan record-keepers,
payroll offices, custodians, etc.) regarding the investor 18 is then
provided by the investor 18 and/or third party 20.

[0099]In this connection, the Independent Expert 38 determines or approves
the minimum data requirement at 46 necessary to make an initial
discretionary asset allocation 50 during the accumulation mode with or
without any additional input from the investor 18 in a Benefit Plan. If
the minimum data requirement 46 is met at 48, then the investment program
10 can make the initial allocation at 50 of the investment assets to be
held during the accumulation mode 14. If the minimum data requirement 46
is not met at 52, then the additional information may be inputted at 54
by other means, such as, for example, by a facilitator 80 calling an
investor 18 in a Benefit Plan on the telephone, and then obtaining and
inputting additional data on behalf of the investor 18.

[0100]Once the minimum data requirement is met at 48, then the investment
program 10 makes an initial allocation at 50 of the investment assets to
be invested during the accumulation mode 14 consisting of an allocation
to 26, 28, 30, 32, and 34, which are one or more investment vehicles 24
that represent one or more asset classes. Existing investments are
converted, through sales and/or purchases or otherwise at 56, 58, 60, 62,
64, 66, 68, 70, 72, and 74 to the investment vehicles 24 used to
implement the investment program 10. Amounts are deducted from the pay or
income stream of each investor 18, purchases from the investment vehicles
24 used to implement the investment program 10 are made. In the
disbursement mode 16, distributions from investment vehicles 24 are
scheduled and/or purchases of annuities 36 are made or other mechanisms
are utilized.

[0101]Additionally, the investment program 10 can implement the savings
plan services 12 during the accumulation mode. The savings plan services
12 include: advice or guidance with regard to the timing and amount of
savings at 76; and/or the automatic implementation of a savings deferral
program at 78, which is coordinated with discretionary asset allocation
services during the accumulation mode 14. The data related to the savings
plan services 12 can come from a variety of sources and include, but are
not limited to salary and amounts saved, including amounts in other
Benefit Plans 100, 102, and 104.

[0102]In connection with the collection of initial data, a facilitator 80
may assist the investor 18 with an understanding of the investment
program 10, and in collecting and transmitting data necessary to meet the
minimum data requirement at 46 as solely determined by the Independent
Expert 38. As presently envisioned, the facilitator 80 has no ability to
formulate or vary the formulation of any services 12, 14, and 16 provided
under the investment program 10. Also, the compensation of the
facilitator 80 will generally be designed and implemented such that there
will be no incentive to depart from the program's allocations at 26, 28,
30, 32, and 34 during the accumulation mode 14, and annuities and other
mechanisms 36 during the disbursement mode, though the facilitator 80 may
generally receive increased compensation for success in
enrolling/maintaining individual plan participants in the investment
program 10, but generally may not receive increased compensation for the
allocation mode 14 and the amount saved under the amounts saved 12
pursuant to the savings plan services during the accumulation mode 14,
and annuities and other mechanisms 36 during the disbursement mode 16.

[0103]Rather, the principal role of the facilitator 80 is to elicit
current, complete, and accurate information from the respective investor
18 on a regular basis. The facilitator 80 may also provide information to
the investor 18, explaining the operation and the benefits of the
investment program 10 on a regular basis, which may take into
consideration significant economic events (e.g., recession). In this
regard, the facilitator 80 may regularly contact the investor 18 to
obtain and/or supply current information. For example a facilitator 80
may assist an investor 18 in 401(k) investment plans with the decision as
to whether or not to elect to opt out at 42 of the savings deferral
program 78 and/or allocation program 14 that was implemented
automatically at the direction of a third party 20. The facilitator 80
may directly input information into the indicative database 44, resident
on the computer 82, on behalf of an investor 18.

[0104]If such data is directly inputted at 54 into the indicative database
44, selected services 12, 14, and 16 of the investment program 10 are
then implemented. At a time shortly before or after the implementation,
an investor 18 may receive an individual investment policy statement 84.
This statement 84 confirms the indicative data inputted into the
indicative database 44 and the action that will be or was taken based on
that indicative data. The investment program 10 may contact at 86 the
investor 18 on a regular or irregular basis through electronic means or
otherwise. The investor 18 may be assigned to a facilitator 80, who may
contact the investor 18 on a regular or irregular basis for the purposes
previously described. The quality of the services provided by the
facilitator 80 will generally be monitored by a facilitator monitor 88,
which may be embodied as a computer program designed or approved by the
Independent Expert 38. The facilitator monitor 88 may determine, among
other things, whether the data included in indicative database 44 was
appropriately provided, and whether the investment vehicles 24 and the
savings plan services 12 were appropriately provided and implemented, in
accordance with the data received.

[0105]Another innovative aspect of the present system and methods includes
provisions for making certain adjustments to the allocations 14, savings
12 and/or disbursements 16 under the investment program 10, which may be
made on an ongoing basis. Adjustments may be made based on updated
information, on information obtained via contact with a facilitator 80 or
otherwise by investor contact at 86. The updated information is inputted
at 54 into the computer program resident on the computer 82 and changes,
if any, to the allocation(s) 26, 28, 30, 32, and 34 and savings plan
services 12 are implemented based on the new information received in
accordance with the procedures established or approved by the Independent
Expert 38. Other changes, including reallocation of assets using
reallocation services 90, will be made due to the passage of time (e.g.,
the aging of the individual plan participant) and external changes (e.g.,
changes in the capital markets) also in accordance with the procedures
established or approved by the Independent Expert 38.

[0106]Disproportionate investment returns may also trigger the investment
vehicles representing the different asset classes 24 in an account
belonging to an investor 18 to be disposed of and acquired in order to
maintain the asset allocation(s) 26, 28, 30, 32, and 34 provided by the
investment program 10. In other words, the program will generally be
rebalanced using rebalancing services 92 on a regular basis, in
accordance with the procedures established or approved by the Independent
Expert 38.

[0107]All of the implementations and changes will be based on the
indicative data included in indicative database 44 that is inputted at 54
into the computer program resident on the computer 82 and then processed
by that computer program, which was designed and/or approved, implemented
and monitored by the Independent Expert 38. As noted above, in yet
another innovative aspect of the disclosed investment program 10, the
Independent Expert 38 will be generally independent from other parties
who receive variable fees and/or profits based on the amount of assets
invested, or the discretionary allocations 26, 28, 30, 32, and 34
implemented during the accumulation and disbursement modes, or the
non-discretionary allocations 26, 28, 30, 32, 34, and 36 recommended by
the computer program resident on the computer 82 during the disbursement
mode 16 in accordance with the procedures established or approved by the
Independent Expert 38.

[0108]Similar or identical mechanisms, such as, for example, the computer
program designed and/or approved, implemented and monitored by the
Independent Expert 38, are used to address the conflicts of interest that
can occur when determining how to establish a spending program that
assists individual plan participants (i.e., an investor) 18 to minimize
taxes, to the extent practical to achieve security for their income
through retirement and manage their investment and mortality risk during
the disbursement mode 16 (e.g., after employment). At retirement, each
investor 18 should optimally develop income strategies potentially using
a variety of products (including annuities and other disbursement
mechanisms 36) with their wealth accumulated during the accumulation mode
14 to reach target horizons to minimize the chances of outliving their
accumulated wealth and/or to achieve additional objectives.

[0109]As is known, licensed securities brokers, or other persons who
typically provide assistance with these decisions, receive commissions
when annuities and other disbursement mechanisms 36 are sold and,
therefore, have or may have interests that could affect the quality of
the assistance that they provide and may be adverse to the investor's 18
interest. Licensed securities brokers, or other persons who manage
investments for an investor 18, and are compensated based on factors that
may not be consistent with the interest of an investor 18, could have an
interest in recommending or implementing inappropriate investment and/or
disbursement strategies in order to maximize the licensed securities
brokers' income rather than maximizing the investor's 18 income.

[0110]In the disbursement mode 16, the representative systems and methods
contained in the representative investment program 10 assists the
investor 18 to develop appropriate income strategies to reach target
horizons with wealth levels pursuant to procedures and/or mechanisms
determined or approved by the Independent Expert 38 on an ongoing basis.
The program's 10 disbursement services at 94 may include, but are not
limited to, combinations such as, for example, annuitization and other
mechanisms 36; such as spend down; IRA rollovers; installment payments;
and withdrawing a fixed amount or fixed percentage. The disbursement
services 94 provided as a component of the present investment program 10
will also assist the investor 18 to establish appropriate asset
allocations 26, 28, 30, 32, and 34, which may vary and change for
different accounts and as investors' age, as determined or approved by
the Independent Expert 38. The disbursement services 94 may also assist
the investor 18 to alter the account sequence of portfolio withdrawals
with a drawdown sequence to help maximize after-tax cash flow and/or
wealth preservation. As an operating component of the present investment
program 10, these services 94 can be provided on an automatic
(discretionary basis) or an advisory basis (non-discretionary) or on a
combination of both, as determined or approved by the Independent Expert
38.

[0111]In accordance with the implementation of the present investment
program 10, all of the implementations, recommendations and changes will
be based on the indicative data included in the indicative database 44
that is inputted into the computer 82 and processed by the computer
program 146 designed and/or monitored and/or approved by the Independent
Expert 38. As noted above, the Independent Expert 38 will be generally or
totally independent from all other parties, who receive variable fees
and/or profits based on the amount of assets invested, or the
discretionary alternatives implemented, or the non-discretionary
alternatives recommended by the investment program 10. The indicative
data included in the indicative database 44 is processed by the computer
program 146 resident on the computer 82. The program resident on the
computer 82 then implements (in the case of a discretionary service) or
advises the investor 18, through a facilitator 80 or otherwise as to the
specific steps that should be taken, and implements the instructions of
the investor 18. In this regard, the investment program 10 may suggest a
course of action that will be implemented unless the investor opts out at
42.

[0112]The program services 12, 14, and 16 are coordinated on a continuing
basis and are specifically tailored to each investor's 18 individual
circumstances and short-term, intermediate-term and long-term funding
needs, including retirement finding needs. The systems and methods
utilized in the present investment program 10 are particularly valuable
because they provide each investor 18 with much needed asset allocation
services 14, 16 and while possibly formulating, and in all cases taking
into account the investor's savings 12, including the present value of
all current and future savings (including social security benefits and
benefits under other pension plans) so that investor 18 will, once the
investment program 10 is implemented, maintain a disciplined investment
policy while being responsive to the best interests of each investor 18.
Moreover, the investments will generally be professionally initially
allocated at 50, rebalanced at 92, reallocated at 90, and disbursed at 94
pursuant to criteria established or approved by an Independent Expert 38,
generally with the on-going assistance of an assigned facilitator 80 to
exploit opportunities in all types of market conditions in a manner that
a typical investor 18 would not or could not exploit on their own without
competent, conflict-free assistance.

[0113]The system and methods of the present investment program 10 are
user-friendly in that the investment program 10 is specifically designed
to eliminate the confusion typically suffered by an investor 18 by
minimizing the investor's 18 input and decision points concerning savings
12, asset allocation 14, and disbursement 16 of assets after employment
and/or during retirement. The result of utilizing the present investment
program 10 is that appropriate savings, allocation, and disbursement are
easier for the typical investor 18 and therefore more likely to occur,
which, in the case of certain types of Benefit Plans, may assist plan
sponsors to fulfill the primary purpose of such Benefit Plans, which is
to provide income after termination of employment for eligible employees.

[0114]Yet another innovative feature of the present investment program 10
includes the elimination for the necessity of establishing, as is common
practice, lifecycle trusts or even separate modeled portfolios. In fact,
an appropriate allocation developed and maintained for an investor 18 can
be precisely calculated to the need of and therefore unique to the
investor 18, with fees for allocation services obtained by selling
interest 56, 58, 60, 62, 64, 66, 68, 70, 72, and 74 in the vehicles, or
from the investor 18 or from a third party 20 representing the investor,
by utilization of at least some of the components of the present
investment program 10.

[0115]Utilization of the present investment program 10 further refines the
allocation process, enabling the allocation process, or the process of
allocating assets in one or more asset classes, generally utilizing
investment vehicles to be more precise by further separating the
allocation process from the investment vehicles. As is known and
currently believed conventional, the sponsors of the investment vehicles
24 pay for many services out of the money management fees that are
charged to the plan sponsor. Referring also to FIG. 4, this process
separates the investor 18 and/or sponsor for a plan 100, 102, and 104
from any dependence on making satisfactory arrangements with the
sponsor(s) of the investment vehicle(s) 24.

[0116]One aspect of the investment program 10, which is described in the
present disclosure, is the Independent Expert 38 that constructs or
approves, among other things, appropriate asset allocation 26, 28, 30,
32, and 34, and annuities and other disbursement mechanisms 36. The
Independent Expert 38 is generally or totally independent from other
persons, such as, for example, persons who manage investment vehicles 24
associated with the investment program 10 who may benefit from
investments made under the investment program 10.

[0117]As presently envisioned, the formulation or approval of asset
allocations 26, 28, 30, 32, and 34, and annuities and other disbursement
mechanisms 36 by the Independent Expert 38 may include, but is not
intended to be limited to, algorithms, studies, analytics, research,
models, papers and other work product or relevant materials provided by
others, including the program operator 22. The program operator 22 is the
person who operates the investment program 10. It is anticipated that
persons who manage investment vehicles will have the most incentive to
become a program operator 22 because operating an investment program 10
will generally lead to continuing, and profitable, relationships with an
investor 18 assisted under the investment program 10. Furthermore, the
Independent Expert 38, in its sole and absolute discretion, may seek the
assistance of others in formulating or approving the asset allocation(s)
26, 28, 30, 32, and 34, and annuities and other disbursement mechanisms
36.

[0118]However, in all cases, the Independent Expert 38 retains the
ultimate control and discretion with respect to the development and
maintenance of the asset allocations 26, 28, 30, 32, and 34, and
annuities and other disbursement mechanisms 36. The asset allocation(s)
26, 28, 30, 32, and 34, and annuities and other disbursement mechanisms
36, as expressed in a computer program resident on the computer 82, when
implemented will not be static, but rather only the Independent Expert 38
in the Independent Expert's 38 sole and absolute professional discretion
(including the ability to approve) may make or approve adjustments to the
asset allocation(s) formulae, taking into consideration the investor's 18
investment goals and savings programs that the asset allocation(s)
represent, and to account for changes in the economy and market
conditions. Thus, the combinations will employ, for the benefit of at
least one investor 18, concepts based on funding needs, including the
present value of all savings (present and future), and the influence by
other persons who may have interest that differ from that of the investor
18 will be strictly limited in a manner that eliminates or ameliorates
any conflict of interest. For example, the compensation that such persons
can pay to the Independent Expert 38 may be limited (e.g., to not more
than 5% of the Independent Expert's 38 annual total income or revenues)
and/or by limiting the ownership interests that person(s) can have in the
Independent Expert 38.

[0119]The information furnished, including information provided by the
investor 18, is possibly one key to providing impartial asset allocation
services 14, 16 and/or savings plan services 12 for the investor 18.
Thus, by incorporating an objective process in to the present investment
program 10, the inherent conflict of interest, which can result from the
way fees are traditionally paid in conventional investment vehicles, is
effectively ameliorated or eliminated.

[0120]Specifically, as is well known, under conventional investment
programs, by implementing or recommending a more aggressive allocation,
the typical money manager, such as, for example, a mutual fund manager
(as well as intermediaries such as licensed securities brokers), would
receive higher fees and net profits, because equity weighted mutual finds
typically pay their managers as well as intermediaries more than bond
weighted mutual funds or other lower risk funds.

[0121]As shown in FIG. 4, a system monitor 96, completely independent of
person(s) who receives variable fees and profits, may be responsible for
monitoring the investment program 10, which preferably includes a
computer program 146 designed or approved, implemented and monitored by
the Independent Expert 38, to insure that safeguards designed to
ameliorate the conflicts of interest are kept in place and complied with
at all times. The computer program 146, and/or the system monitor 96,
may, in addition, be monitored and/or certified by third parties (e.g.,
an accounting firm), having no financial interest in the specific
investments being made in the sponsors plan for an investor 18 to ensure
that the conditions safeguarding against conflict(s) of interest are in
place and have been adhered to.

[0122]Under the present investment program 10, which includes the systems
and methods described in the present disclosure, there may be a separate
fee paid for asset allocation services 14, 16 and/or savings plan
services 12, which may be limited to an annual asset based fee (e.g., up
to 100 basis points) and reimbursable expenses (in the case of Benefit
Plans which invest "direct expenses") which may be similarly limited to a
percentage of the total amount invested (e.g., up to 25 basis points). In
the alternative, the program operator 22 may charge only the fees from
the investment vehicles 24 or investments in which an investor's 18
assets are placed.

[0123]FIG. 3 is a schematic representation of the investment program 10
structure as seen by each of a plurality of investors 18, 18a, 18b, and
18c. As illustrated, the party 98 operating the investment program 10
(e.g., financial services company, financial intermediary 144, etc.)
communicates with a system monitor at 96 that controls the computer 82
having the computer program resident thereon which in turn communicates
with each investor 18, 18a, 18b, and 18c electronically or other
conventional means, as is known in the art.

[0124]The computer based system monitor 96 collects data from each
underlying service, including, where utilized, services 12, 14, and 16
and can keep track of each investor's account. The computer based system
monitor also collects data and transaction instructions from the program
operator 98 and carries out transactions changing the allocation(s),
saving plans, and/or distribution mechanisms of an investor's 18, 18a,
18b, and 18c account upon any change in the indicative data included in
indicative database 44, which may occur from the passage of time (aging
of the investor) or due to new data provided by the investor contact 86
or through the facilitator 80. Additionally, the system monitor 96
aggregates and nets the transactions between the investment allocations
26, 28, 30, 32, and 34, and annuities and other disbursement mechanisms
36 and their underlying investment vehicles 24.

[0125]The underlying investment vehicle(s) may simply deduct investment
advisor fees from the vehicles 56, 58, 60, 62, 64, 66, 68, 70, 72, and 74
(e.g., by selling interests in it or otherwise) and provides such data to
the system monitor 96. These fees are presently anticipated to be in the
form of an hourly fee, a per capita fee, or an asset based fee or any
combination of the foregoing fees may be set by the program operator
based on existing market conditions.

[0126]As shown in FIG. 4, the system monitor 96 gathers and processes
indicative data included in indicative database 44 from the investor 18
accounts in the savings plan 12; the investment vehicles and asset
classes 24 used to implement the discretionary allocation(s) 26, 28, 30,
32, and 34 during the accumulation mode 14; the discretionary and
non-discretionary services (including annuities and other disbursement
mechanisms 36) during the disbursement mode 16; and, in the case of
Benefit Plans, aggregates the accounts by separate and distinct Benefit
Plans 100, 102, and 104. In the case of Benefit Plans, the total
individual plan participant account in investment vehicles within that
Benefit Plan, the system monitor 96 may calculate and report to each
Benefit Plan trustee, plan sponsor, or third parties as appropriate the
total individual plan participant account assets in each investment
vehicle used to implement the discretionary and non-discretionary
allocation. Transactions may be "netted" and aggregated within each
Benefit Plan 100, 102, and 104 and the system monitor 96 may "net" and
aggregate transactions across some or all Benefit Plans when required.

[0127]The system monitor 96 also may calculate and may report the expenses
associated with the investment program 10 for each investor account 18,
18a, 18b, and 18c and, in aggregate, for each Benefit Plan 100, 102, and
104. The system monitor 96 may debit each investor account 18, 18a, 18b,
and 18c for any expenses associated with the investment program 10 due or
reflects the reduced value of interests in the vehicle(s) in the investor
accounts 18, 18a, 18b, and 18c. The system monitor 96 calculates and
reports any expenses associated with the investment program 10 paid by
each individual plan participant account in the investment vehicles, by
each investor 18, 18a, 18b, and 18c and by each Benefit Plan 100, 102,
and 104.

[0128]The program 10 and the system monitor 96 (see FIG. 4) generally
insulate any person (such as, e.g., an investment vehicle manager 142 or
a financial intermediary 144) who receives variable fees and profits,
depending on the services 12, 14, and 16 provided from the Independent
Expert 38 and its fees, and the facilitators, and their compensation by
maintaining separate systems of compensation that is memorialized in the
system monitor. This insulation and separation removes or substantially
reduces any economic or profit incentive on the part of persons who are
in a position to actually affect individual plan participants or Investor
18 decisions or to direct an investor 18 to invest in a manner that
generates higher fees and/or profits that may be inappropriate for
investor 18 but more profitable to persons who receive variable fees and
profits, depending on the allocation (including whether or not an annuity
is selected) or the amount of the finds invested such as a typical money
manager. The computer program utilized by the system monitor, in its
initial form, will be initially designed and constantly updated to follow
and adhere to the safeguards and conditions designed to mitigate or
eliminate overreaching by person(s) who receives variable fees and
profits, depending on the allocation (including whether or not an annuity
is selected) or the amount of the funds invested, including, where
appropriate those contained or implicit in ERISA, as well as other
regulatory constraints and requirements.

[0129]As illustrated in FIG. 5, the investment allocation portion of the
investment program 10, which includes the systems and methods of the
present disclosure, may require certain computer hardware, including but
not limited to, a mainframe computer or server(s) 106 for processing
large volumes of data stored in a data storage unit 108 and a
communications system, including, but not limited to, intranet, Internet
112, and other communication vehicles, as is known to those skilled in
the art. The stored data is taken from data provided by the investor 18
or third parties, as described above. A personal computer or workstation
118 having a hard drive or other storage device, an input device such as
a keyboard 120 and mouse 122, and an output device such as a display 124
and printer 126 are operatively connected to the computer 118, as is
known to those skilled in the art. The program operator's (22) computer
140 may be used to communicate with and monitor the investor's (18)
computer 118, as is known to those skilled in the art. For example, the
program operator's computer 140 may be networked together with a laptop
computer 130 controlled by the facilitator 80 and the investor's computer
118 in a party operator network 110, which provides a gateway to the
Internet 112 via Internet service provider 114. Data feeds 116 may also
be networked into the party operator network 110. In particular, computer
programs used to implement asset allocation services 50, 90, and 92 and
the programs used to implement the savings services 12 loaded on the
application servers 106 are accessed by, or on behalf of, the program
operator 22 and used to transmit under the investment program 10 in a
tangible form, to each investor 18, including participants in Benefit
Plans, as is known to those skilled in the art.

[0130]The present investment program 10 includes a unique data processing
system that, among other things, automatically enrolls new employees and
non-participating employees in Benefit plans (e.g., 401(k), 403(b), 457),
and otherwise and moves individuals into appropriate contribution rates
and appropriate investment allocations over time, unless the individual
plan participant (where applicable) opts out of the savings plan, the
contribution method, or the allocation method. In doing so, the present
program is successful in turning the "win/lose" proposition normally
associated with automatic enrollment into a "win/win" proposition for all
the interested constituencies, especially the plan participants.

[0131]The present investment program 10 also enables the automation of the
process of selecting investment vehicles. By reducing the steps in the
investment vehicle selection process (i.e., how much is up to the client)
the investment vehicle selection process becomes more cost effective,
efficient, and assists all persons involved in complying with applicable
laws and regulations.

[0132]The present investment program 10 uniquely serves the interests of
each investor 18 including plan participants, as well as employers 150
(see FIG. 4) who sponsor Benefit Plans. An investor 18 will benefit by
taking what is otherwise a complex set of decisions and reducing them to
an automatic procedure, which, if simply adhered to, is believed to
materially increase each investor's probable return, including their
probable retirement income. The present investment program 10 will also
benefit plan sponsors in that the investment program 10 will reduce their
risk of liability by allocating assets in each plan participant's account
based on: 1) the information available about each plan participant; 2)
pursuant to prudent procedures; and 3) based on the formulae developed or
approved and implemented in various computer programs, by a respected
Independent Financial Expert, whose qualifications may have been reviewed
by the United States Department of Labor (the "Department").

[0133]The results derived from the implementation of the investment
program 10 are believed clearly superior to the "one size fits all"
approach normally used in automatic enrollment procedures, and the
emphasis on investment vehicles, and their recent performance, currently
used in the marketplace. It is also believed that the investment program
10, particularly if coupled with a finding by the Department that the
procedures are permitted under ERISA, will materially reduce the risk of
plan sponsors who decide to use any of the mechanisms outlined above,
including "negative election" mechanisms outlined above. Further, the
results derived from the implementation of the investment program 10 are
believed to permit the money managers (and other financial
intermediaries) to control their clients by providing the most important
services relative to achieving financial goals without engaging in
transactions that could be considered prohibited self dealing under
ERISA.

[0134]Another aspect of the present investment program 10 arises from
placing investment vehicles in their proper perspective. Selection of a
limited universe of investment alternatives in an employer-sponsored
participant directed account plan is typically the responsibility of the
sponsoring employer (who acts as a fiduciary when selecting or monitoring
such alternatives). The fiduciaries, including the plan sponsor may then
be provided fiduciary relief under section 404(c) of ERISA for the
allocation decisions when a participant makes an affirmative election to
invest from among the vehicles. If a vehicle becomes inappropriate, and
needs to be replaced, there is no affirmative election with regard to the
replacement vehicle. This could cause the relief that is otherwise
available to become unavailable due to the absence of any affirmative
election. An element of the present investment program 10, by placing
investment alternatives in their proper perspective, addresses this
problem. Instead of electing an investment in a particular vehicle,
participants can elect in an alternative that are instead described more
generically (e.g., the mixture of asset classes designed for the
participant's circumstances). This investment alternative enables the
fiduciary (in the case of a benefit plan) to change investment vehicles
without obtaining an additional affirmative election from individual plan
participants, while continuing to enjoy relief for an Individual plan
participant's asset allocation decisions.

[0135]By placing investment vehicles in their proper perspective, it is
also believed that an investor 18, or a third party acting on behalf of
an investor 20, will be better enabled to make a single election
regarding the allocation of a particular investor's assets because it is
believed that the vehicles can be changed by the decision of a third
party acting on behalf of an investor, up to and including through
retirement. If there is no plan fiduciary that makes the decision, this
decision can be made or approved by another independent person such as
the Independent Expert 38.

[0136]In the alternative, the initial positive election can include a
formulaic method (e.g., select the investment vehicle(s) 24 with the
lowest fees that can accomplish the objective of the Investment Program
10, from those available under the Investment Program 10 for selecting
alternative vehicles or circumscribing the discretion of the persons who
select the investment vehicles. For example, when a participant elects to
receive a rollover distribution of his or her retirement benefits from an
employer-sponsored 401(k) plan, the investment vehicles in a plan may no
longer be available. At that point in time, the present investment
program 10 permits the assets in the disbursement mode to be allocated
(and ultimately distributed) automatically in replacement vehicles, such
an IRA or other account, which IRA and vehicles are selected on a basis
that was disclosed and agreed to, by the individual plan participant or a
person acting on behalf of the investor, at the time of the initial
election, or at any subsequent time. This enables a financial institution
or other financial intermediaries to retain their relationships with
their clients on the basis of providing value-added services in a manner
that addresses possible conflicts of interest, and for investors to
continue receiving such value-added services up to and through retirement
while minimizing or eliminating additional involvement and/or decisions
by the individual plan participant.

[0137]Changes and modifications in the specifically described
representative embodiments can be carried out without departing from the
scope of the disclosure which is intended to be limited only by the scope
of the appended claims.